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12 Reasons Why Customer Service Is So Important for 2022

To help you overcome this mismatch between customer service expectations and reality, this guide will explain the importance of customer service for customers, employees, and businesses.

8 min read

It doesn’t matter how great your product or service is. If your customer service is below par, attracting and retaining customers will be an uphill struggle.  

Many brands may have upped their investment in customer service in the last few years, but customer expectations are still not being met. According to a recent survey, over 50% of consumers haven’t noticed any improvement in customer service. And 23% have said that customer service has gotten worse. 

To help you overcome this mismatch between customer service expectations and reality, this guide will explain the importance of customer service for customers, employees, and businesses.

Why Is Customer Service So Important?

Customer service is important because it inspires customer loyalty and makes employees’ jobs easier. This, in turn, helps businesses grow. By providing great customer service, organizations can recover customer acquisition costs, retain talent, and foster brand loyalty. 

The Importance of Good Customer Service to a Customer

Good customer service meets customers’ expectations, improves satisfaction, and reduces friction. 

Meeting customer expectations

Customers don’t just hope that brands will deliver superb customer service — they expect it. What’s more, their expectations are rising. Today, more than 65% of people expect more from customer service than they did three to five years ago. 

Fail to provide customers with a superior customer service experience, and they will go elsewhere — even if it means paying more for a similar product. Almost three-quarters of consumers say they have spent more to shop with a company that delivers superior customer service. 

Improving customer satisfaction

When customers interact with a brand’s customer service team, they usually have a question they want answered or a problem resolved. Whether a customer ends up satisfied or frustrated depends on how quickly and well customer service reps respond to their query.

More often than not, customers are left disappointed—46% of customers find customer service frustrating.

A positive experience will result in satisfied customers. On the other hand, a low-quality customer service experience will lead to churn.

A frictionless experience

Customers want the problems they encounter to be solved fast. For 89% of customers, speed of response and resolution are the two most important parts of excellent service, irrespective of the channel (i.e., types of customer service).

Unfortunately, traditional methods of customer service support are plagued with inefficiencies. Customers don’t want to fill in customer service forms, wait on hold, or explain their problems to a robot via live chat. They want to talk to a human being who knows who they are and has the means to resolve their issue promptly without too much back and forth. 

Research shows that:

  • 84% of customers are irritated when agents don’t have the necessary information to sort out an issue. 
  • More than 50% of customers are annoyed when they have to repeat their problem several times to different agents. 
  • 60% of customers are frustrated when their issues are not resolved during first contact.

Even small friction points in the customer service experience can result in customers dropping off.

Organizations need to invest in effective software for customer service to overcome these problems. With a co-browsing solution like RemoteHQ, agents can access a customer’s account in real-time, solving their issues on their behalf and on the first call. 

The Importance of Good Customer Service to an Employee

For employees, excellent customer service can lead to increased productivity, less stress, and greater job satisfaction. 

Increased productivity

When agents can provide great customer service, they can solve issues faster. This means they can spend less time on each customer interaction — a win for both the customer and an agent (whose compensation often reflects their resolution time). 

Giving agents a way to solve problems fast is vital as many customer agents complain of heavy workloads. Whether it’s maintaining a database of consumer information or troubleshooting issues, customer service professionals feel like they have too much to do and not enough time to do it.  

A great customer service experience doesn’t happen accidentally. It requires the right environment, skills, and tools.

Agents frequently spend a considerable amount of time trying to understand the issue that a customer has encountered. Even when they can pinpoint the problem, communicating the next steps to a customer can be challenging. Customer service software like RemoteHQ lets customers share their accounts via a co-browser, making it easier and faster for an agent to resolve customer issues. 

Reduced stress

Customer service is a stressful job. Not only do customer service professionals have to deal with complicated problems, but they are also typically under time pressure. Throw an angry customer into the mix, and burnout is never far away. 

Unsurprisingly, turnover rates for customer service agents are between 30% and 45% globally. What’s more, the average entry-level agent will leave their job after just a year.

Some of the stressors customer service teams have to deal with are easy to fix. Nearly 60% of agents say they don’t have the knowledge to provide a better customer service experience. Here, customer service training can help.

Another 72% of customer service reps wish there was an easier way to access customer information via customer service tools. Whatever software for customer service you choose, make sure it lets agents search for all the information they need to assist customers.

Improved job satisfaction

When customers are unhappy, customer service agents suffer. Having to listen to complaint after complaint on a daily basis is not only annoying, but over the longer term, it can also be demoralizing and can contribute to bad company culture.

Few employees will stay at a job where they feel stressed out and underappreciated.

Fortunately, the opposite is also true. When customers are happy, customer agents’ satisfaction with their jobs is also likely to be higher.

Happy customer agents create a virtuous circle for their employers. Research shows that when agents are happy, this typically leads to happy customers. 

The Importance of Good Customer Service to a Business

Exceptional customer service is a powerful business asset. Businesses that consistently deliver excellent customer service benefit from higher revenue, customer retention, a stellar reputation, better resilience than competitors, and deep product insights.  

Increased revenue 

Treating customers well has a big impact on a business’s bottom line.

More than 7 in 10 buying experiences depend on how customers feel they are being treated. As a result, strong customer relationships can mean the difference between making a sale and sending a prospect into the arms of a competitor.

Being there for your customers can increase their confidence in buying from you. It can also make them spend more. Research shows that 68% of consumers are willing to pay more for services and products from a company that delivers a better customer service experience.  

A “better” customer service experience is one that’s personalized. Over 70% of customers expect customer service agents to work together so that they don’t have to repeat themselves. With remote co-browsing solutions like RemoteHQ, agents can consistently deliver a personalized experience to customers by accessing their customer information in real-time and resolving issues immediately.

When agents know each customer’s needs, they can also find more opportunities to upsell and cross-sell, further contributing to profit growth. Customers are more inclined to try additional products or services from a company known for providing stellar customer experiences.

In the end, organizations that offer superior customer service experiences grow their revenue by 4% to 8% above their peers. The opposite is also true. Bad customer service can put profit into a downward spiral. 

Competitive advantage

It’s not just price and quality today’s brands are competing on. When two companies sell a similar product or service, excellent customer service can give them the competitive advantage they need to stand out. 

The vast majority of people admit they are loyal customers of a brand because it delivers great customer service.

On the other hand, 61% of consumers would switch to a competitor following a single bad experience. After two negative experiences, more than three-quarters of customers are ready to call it quits. 

They likely won’t return, either. Most customers won’t go back to a company they had a bad experience with, even if a friend tells them that the service has gotten better. 

Improved ability to retain customers

Customer service plays a central role in most retention strategies. The reason why is that customers won’t stay loyal to a brand where they don’t feel valued. Bad customer service can destroy customer lifetime value.

Retaining existing customers can be anywhere between 5 and 25 times more affordable than attracting new ones, so raising the bar with your customer service is well worth your while.

Customer service is especially important when customers are adopting new products or services. The more support they have, the more likely they will stay engaged with a brand.

By increasing your customer retention by just 5%, you can grow your profits by 25%. This is because repeat customers spend a whopping 300% more with a brand. Current customers are also likely to spread awareness about your brand and inadvertently bring you new customers through word-of-mouth advertising and referrals.

Better reputation 

Amazon founder Jeff Bezos famously said, “make customers unhappy in the physical world, they might each tell 6 friends. If you make customers unhappy on the Internet, they can each tell 6,000 friends.” 

Customer service professionals are a company’s link to customers. As a result, customer service can either make or break a company’s reputation. More than 93% of customers say online reviews, whether on social media or review sites like Trustpilot, affect their purchasing decisions. 

Just one subpar interaction between a customer service agent and a customer can lead to a negative review that influences thousands of people. As many as 94% of customers say an unfavorable online review made them avoid a business.

Likewise, a stellar brand image can attract more business—1 in 2 people become a customer of a brand due to their reputation for excellent customer service. A good reputation can also entice investors, employees, and partnerships.  

Resilience

Running a successful business isn’t easy. Based on data from the Bureau of Labor Statistics, 20% of small businesses fail within a year of starting, about 50% fail by the five-year mark, and 70% shut their doors by year 10. 

While many factors can contribute to a business failing, not meeting customer expectations when it comes to customer service is one of the more critical ones. 

In a tough market, buyers whose concerns are not addressed will quickly move on to a competitor. Conversely, customers who feel seen will reward a company with repeat business, even if things occasionally go wrong.

Close to 80% of consumers say they would forgive a brand for making a mistake if they had excellent customer service. In contrast, only one in five people will forgive a brand after a poor experience if its customer service isn’t great. 

Product insights

One often-overlooked advantage of good customer service is that it can help companies make better business decisions. 

Front-line customer support professionals have direct access to customers. This allows them to collect feedback that may prove useful in future product or service development/improvement plans. 

Whether it’s product UX, missing or underutilized features, or even the customer support experience itself, the kind of feedback customer teams frequently receive can be invaluable for proactive businesses that want to better understand their customer base and their desires.

As a bonus, when customers feel like their suggestions have been taken into consideration — or even see their feedback implemented — they are much more likely to remain loyal to a brand.

Business Success Hinges on Great Customer Service

From meeting customer expectations to retaining employees and growing revenue, there are many reasons why customer service matters in 2022. However, they all boil down to one thing: long-term business success. 

With some of the most successful brands today excelling at customer service, meeting customer needs and providing superb experience is non-negotiable for companies that want to make it big.

Although many brands are still struggling to get it right, customer service is not that challenging. By following best practices like valuing customers’ time, being friendly, and using the best customer service software, every business can delight customers and win them for life.